“How did we have sweepstakes before Facebook?” That question, which I heard during a call last week, summarizes the tremendous impact that social media has had on the use of sweepstakes and contests. These promotions are more popular than ever, in part because sponsors have found that social media sweepstakes are often easier to implement, less expensive and more effective at promoting a company’s products than a traditional sweepstakes.
In some ways, social media sweepstakes are no different than other sweepstakes. However, virtually all of the laws and regulations pertaining to sweepstakes were enacted before there was social media. Listed below are 10 things you should know about creating or sponsoring social media sweepstakes during these somewhat unsettled periods.
- Eligibility Restrictions. Because social media sweepstakes are often be accessible throughout the world, it is essential to clearly notify potential entrants that the sweepstakes is only open to a defined category of entrants, which usually will be legal residents of the U.S. You should not allow others to enter without approval by a lawyer familiar with sweepstakes law.
- State Laws Still Apply. Social media sweepstakes are subject to all federal and state regulations that apply to traditional sweepstakes. This may include sweepstakes laws enforced by the FTC, state attorneys general, the U.S. Postal Service, the FCC and others. It is critical that you identify all applicable regulations and that your social media sweepstakes complies with all of these requirements.
- Social Media Rules. In addition to federal and state laws, certain social media sweepstakes are subject to rules issued by the media you are using. Facebook, Pinterest, and other social media publish their rules for sweepstakes and it is important to comply with these requirements.
- Personal Information Requests. Sweepstakes sponsors need to protect the personal information they collect from entrants. For that reason, the official rules for a social media sweepstakes should only request the information necessary to confirm the entrant’s eligibility and to deliver the prize to the winner. Do not require an entrant to provide unnecessary personal information in order to enter a sweepstakes.
- Children’s Online Privacy Protection Act. COPPA applies to personal information that is requested or received from children that are under the age of 13. It is essential that sponsors of social media sweepstakes strictly comply with the Act’s requirements if they receive such information or if a sponsor realizes that its sweepstakes may be found to attract the interest of children under 13.
- Alternate Method of Entry. While there may be some dispute as to whether requiring participants to enter online constitutes “consideration” (i.e. entering online is equivalent to requiring a purchase) many people believe that the best practice is to include an alternate method of entry (AMOE) in all social media sweepstakes. This alternate entry option will help protect the sweepstakes from being considered to be an illegal lottery.
- Confirming Eligibility. Entering a social media sweepstakes may be easier than filling out an entry form in a store, but that may also make it easier for some of the individuals to try to increase their chance of winning by entering multiple times, or more often than permitted in the rules or by entering under different names. To prevent this activity, the sponsor needs to clearly describe the number of entries that will be allowed by each entrant and carefully monitor all of the entries that are received.
- Sponsor’s Liability. Social media sweepstakes may involve more technical things that can go wrong during the course of the promotion. These problems may arise due to technical malfunctions, systems crashing, attack by hackers, mistakes, power outages, accidents, acts of God, etc. The best practice is to anticipate the potential problems that may occur and provide for these possibilities in the disclaimer of liability section of the official rules.
- Registration of the Sweepstakes. The sweepstakes laws in New York and Florida may require that your sweepstakes be registered in these states. Those requirements apply to all types of sweepstakes if the values of the prizes exceed $5,000. The best practice is to determine if registration is required and make certain that all required registration materials are filed on time.
While these tips may be helpful, the best best practice with regard to social media sweepstakes is to consult with an attorney who is familiar with sweepstakes law before you launch a social media promotion.
This post was written by retired Thompson Coburn partner Dale Joerling. If you have any questions about the topics discussed in this post, please contact Thompson Coburn partner Hap Burke.